The Members of Alufluoride Limited Visakhapatnam A.P.
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of ALUFLUORIDE LIMITED (theCompany) which comprise the Balance Sheet as at March 312020 the Statement ofProfit and Loss (including Other Comprehensive Income) the Statement of Changes in Equityand the Statement of Cash Flows for the year ended on that date and a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas the financial statements).
In our opinion and to the best of our information and according to the explanationsgiven to us the accompanying financial statements give the information required by theCompanies Act 2013 (the Act) in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(Ind AS) and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 312020 the profit and total comprehensiveincome changes in equity and
its cash flows for the year ended on that date. Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Sl. No. ||Key Audit matter ||How the matter was addressed in our audit |
|1 ||Adoption of new Ind AS 116: "Leases" accounting standard ||Our audit procedures on adoption of Ind AS 116 include: |
| ||The Company has adopted Ind AS 116 Leases in the current year. The standard introduces a new lease accounting model wherein lessees are required to recognize a right-of-use (ROU) asset and a lease liability arising from a lease on the balance sheet. The lease liabilities are initially measured by discounting future lease payments during the lease term as per the contract / arrangement. ||> assessed and tested new processes and controls in respect of the lease accounting standard (Ind As 116); |
| || ||> assessed the company's evaluation on the identification of leases based on the contractual agreements into with lessors and our knowledge of the business; |
| || ||> assessed the reasonableness of the discount rates applied in determining the lease liabilities; |
| ||Adoption of the new standard involves significant judgements and estimates including determination of the discount rates and the lease term. Additionally the standard mandates detailed disclosures in respect of transition. Refer Note 5.03 to the financial statements. ||Up on transition as at 1st April 2019 |
| || ||> evaluated the method of transition and related adjustments; |
| || ||> tested completeness of the lease data by reconciling the Company's operating lease commitments to data used in computing ROU asset and the lease liabilities. |
| || ||> assessed the key terms and conditions of each lease with the underlying lease contracts; and |
| || ||> assessed and tested the presentations and disclosures relating to Ind AS 116 including disclosures relating to transition. |
|2. ||Assessment of subsequent events arising out of Covid-19 pandemic ||Our audit procedures designed to assesses the following: |
| ||The spread of COVID 19 pandemic in India has led to Nationwide Lockdown with effect from 24.03.2020 and the Company had temporarily shut down all its offices/ plant as per the Government of India restrictions imposed due to lockdown. ||> appropriate procedures to obtain sufficient appropriate audit evidence about subsequent events that require adjustment of or disclosure in the financial statements. |
| || ||> Assessed and tested the procedures management has established to ensure that subsequent events are identified. |
| ||The uncertainty and challenges caused by the COVID-19 pandemic including the likelihood of unplanned events occurring at any time the uncertain duration of this current environment professional judgement is required to carefully evaluate events occurring between the date of the financial statements and the date of the auditor's report (i.e. subsequent events) and the effect if any of such on the entity's financial statements. || |
| || ||> Discussions with the management and those charged with governance as to whether any subsequent events have occurred which might affect the financial statements. |
| || ||> Performing analytical procedures for assessing the entity's subsequent period books of account for assessing uncertainties exists that cast significant impact on going concern. |
| || ||> Performing analytical procedures and assessing processes followed by for physical inventory assets counting conducted by management at a date other than the date of financial statements due to lockdown restrictions. |
|3. ||Estimation of decommissioning and restoration provision on leased land on implementation of expansion projects by the company. ||Our audit procedures to assess the decommissioning provision included the following: |
| || ||> We assessed the valuation methodology and evaluated the reasonableness of key assumptions applied by the management to calculate new and existing provisions. |
| ||The determination and valuation of provision is highly judgmental by its nature as they are calculated based on assumptions that are impacted by future activities and the legislative environment in which the company operates. || |
| || ||> We tested the calculation of the decommissioning provisions with external factors for the expansion projects and checked the accuracy and relevance of the input data used. |
| || ||> We found the disclosures in the financial statements to be appropriate. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board of Directors' Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the financial statements and our auditor's report thereon. The abovespecified reports are expected to be made available to us after the date of this auditor'sreport.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
When we read the above specified reports if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in accordance with the Ind AS andother accounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies;
making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors is responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our
opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We
consider quantitative materiality and qualitative factors in (i) planning the scope ofour audit work and in evaluating the results of our work; and (ii) to evaluate the effectof any identified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government in terms of Section 143(11) of the Act we give inAnnexure- A a statement on the matters specified in paragraphs 3 and 4 of theOrder.
2. As required by Section 143(3) of the Act based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312020 from being appointed as a director in terms of Section 164 (2) of theAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure B. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
The remuneration paid to the Directors by the company is in accordance with theprovisions of the sec.197.
h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company does not have any pending litigations that would impact its financialposition.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delays in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For BRAHMAYYA & CO.
Chartered Accountants Firm Regn No. 000513S
(C.V. Ramana Rao)
Partner M No: 018545 UDIN : 20018545AAAABX7503
Place: Visakhapatnam Date : 22.06.2020
Annexure A to the Independent Auditor's Report:
The Annexure A referred to in our Independent Auditor's report of even date to themembers of the ALUFLUORIDE LIMITED VISAKHAPATNAM for the year ended 31stMarch 2020. We report that:
i) a) The Company has maintained proper records showing full particulars includingquantitative
details and situation of fixed assets.
b) The fixed assets have been physically verified by the management during the year.According to the information furnished to us no material discrepancies have been noticedon such verification.
c) The title deeds in respect of all immovable properties are held in the name of thecompany.
ii) Physical verification of inventory has been conducted during the year by themanagement at reasonable intervals. The discrepancies noticed on such verification betweenthe physical stocks and the book records were not material.
iii) The Company has not granted any loans secured or unsecured to Companies FirmsLimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Consequently clauses 3 (iii) (a) (b) and (c) ofthe Order are not applicable.
iv) The company has neither given any loans to the directors or any other persons inwhom the director(s) is interested nor given/provided any guarantee/security in connectionwith any loan taken by directors or such other persons as per the provisions of section185 of the Companies Act 2013. The investment made by the company in an earlier year doesnot exceed the limits prescribed under section 186 of the Companies Act 2013.
v) The Company has not accepted any deposits from the public. Consequently the clause3(v) of the order is not applicable to the Company.
vi) Rules made by the Central Government for the maintenance of cost records undersub-section (1) of section 148 of the Companies Act 2013 are not applicable to thecompany.
vii) a) According to the information and explanations given to us and on the basis ofexamination of the
records of the Company amounts deducted/ accrued in the books of account in respect ofundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand other material statutory dues have been regularly deposited during the year by theCompany with the appropriate authorities.
According to the information and explanations given to us no undisputed amounts arepayable in respect of income tax sales tax service tax duty of customs duty of excisevalue added tax or cess and other material statutory dues which were in arrears as at 31stMarch 2020 for a period of more than six months from the date they became payable.
b) As at 31st March 2020 there have been no disputed dues which have not beendeposited with the respective authorities in respect of Income tax Service tax duty ofcustoms duty of excise value added tax and Cess except the following:
|Sl. No. ||Name of the Statute ||Nature of the dues ||Amount * in Rs. ||Period to which the amount relates ||Forum where dispute is pending |
|1. ||Income Tax Act 1961 ||Tax Collected at Source (TCS) demand ||56020 ||F.Y 2012-13 ||Deputy Commissioner of Income Tax |
*Net of Pre deposits made.
viii) According to the records of the Company examined by us and the information givento us the company does not have any loans or borrowings from the Financial Institutionbank Government or debenture holders; consequently clause 3(viii) of the order does notapply.
ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). No term loans were raised during the FY underreport. Consequently the clause 3(ix) of the order does not apply.
x) According to the information and explanations given to us no fraud on or by theCompany has been noticed or reported during the course of our audit.
xi) The managerial remuneration has been paid or provided in accordance with theprovisions of section 197 read with Schedule V to the Companies Act 2013.
xii) In our opinion the company is not a Nidhi Company. Consequently the clause3(xii) of the order is not applicable.
xiii) According to the information and explanations given to us and on overallexamination of the records of the Company we report that all transactions with relatedparties are in compliance with the provisions of sections 187 and 188 of the CompaniesAct 2013 and the related party disclosures as required by relevant Indian AccountingStandards are disclosed in the financial statements.
xiv) The Company has not made any preferential allotment or private placement of sharesor fully/ partly convertible debentures during the year under review. However thewarrants which were preferentially issued by the company in the previous financial year2018-19 have been allotted to the proposed allottees on exercise of their right.
xv) The Company has not entered into any non cash transactions with the directors orpersons connected with them during the year under report. Consequently the clause 3(xv)of the order is not applicable.
xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Consequently the clause 3(xvi) of the order is not applicable.
| || ||For BRAHMAYYA & CO |
| || ||Chartered Accountants |
| || ||FRN : 000513S |
| || ||(C.V. RAMANA RAO) |
| || ||Partner |
|Place ||Visakhapatnam ||M.No : 018545 |
|Date ||: 22.06.2020 ||UDIN : 20018545AAAABX7503 |
Annexure B to the Independent Auditors' Report
Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of ALUFLUORIDELIMITED VISAKHAPATNAM (the Company) as of 31st March 2020 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of directors of the company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the Guidance Note) issued by ICAI and the Standards on Auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
| || ||For BRAHMAYYA & CO |
| || ||Chartered Accountants |
| || ||FRN : 000513S |
| || ||(C.V. RAMANA RAO) |
| || ||Partner |
|Place : ||Visakhapatnam ||M.No : 018545 |
|Date : ||22.06.2020 ||UDIN : 20018545AAAABX7503 |